New Skyward HQ would be tax-free in exchange for jobs

STEVENS POINT – The city of Stevens Point will not see a payoff in tax revenue from its agreement with SkyGroup for almost 20 years, but the city says the long-term benefits will be worth the wait.

A city committee voted this week to recommend approving an agreement with SkyGroup to develop educational software firm Skyward's headquarters in Stevens Point's Industrial Park. According to the agreement, the developer would spend at least $20 million on the project but will be reimbursed for its property taxes every year until 2033.

The new headquarters will be located in the city's Tax Incremental District No. 9.

SkyGroup will develop Skyward's new headquarters, which will be a 200,000-square-foot commercial office building. The company is expected to hire at least 600 full-time workers over the next 10 years, and construction work is expected to be completed by the end of 2016.

Stevens Point Mayor Andrew Halverson said the developer will pay taxes on the increase in property value, which the city will then annually reimburse to the developer.

The city assessor's office said the property value for the site has not yet been determined because the land wasn't purchased until after the first of the year.

When it is assessed, however, the agreement states that the improvements the developer makes should result in at least $18.5 million in increased property value. Based on the current property tax rate of $25.19 per $1,000 of city-assessed value, that would equate to $466,015 in annual taxes today. The actual payment each year would fluctuate if there are changes to the tax rate or the assessed property value.

City Comptroller/Treasurer Corey Ladick said such a tax incentive is a tradeoff for the city to benefit in the long term.

"There's a lot of other communities that would love to have these jobs and these developments," he said. "We do have to be competitive to go out there and get these developments."

In addition to giving up the property taxes from the new building, the city also will spend an estimated $500,000 on infrastructure changes to accommodate the anticipated increase in traffic near the headquarters. However, the deal calls for SkyGroup to give the city $1 million before that work begins.

City Council member Mike Phillips said the agreement represents an investment in the city's future.

"We're not going to see any dollar value until the TIF district is completed, but over time, they (SkyGroup) have to employ so many employees, they're going to be spending money in town," he said. "That generates tax dollars."

The City Council will vote on the agreement Monday.

Sari Lesk can be reached at 715-345-2257. Follow her on Twitter as @Sari_Lesk.